Total Graphite Plc Regulatory News (TGR)

This announcement includes statements that are, or may be deemed to be, "forward-looking statements". In some cases, these forward-looking statements can be identified by the use of forward-looking terminology, including the terms "targets", "believes", "estimates", "anticipates", "expects", "intends", "may", "will", "should", "could" or, in each case, their negative or other variations or comparable terminology. They appear in a number of places throughout this announcement and include statements regarding the intentions, beliefs or current expectations of the Company and the Board. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. Forward-looking statements are not guarantees of future performance. The Company's actual performance and results of operations may differ from the forward-looking statements contained in this announcement.

10 August 2023

Tirupati Graphite plc

('Tirupati', 'TG' or the 'Company')

Tirupati Receives Prepayments to Support Production Ramp-up

Tirupati Graphite plc (TGR.L, TGRHF.OTCQX), the specialist graphite producer and a supplier of critical minerals for the green transition economy, is pleased to announce it has received c.US$ 1 million net of prepayments from existing clients, to support the ramp-up of operations.

Shishir Poddar, Executive Chairman, said:

"Today marks a significant milestone in Tirupati's journey and reflects a step up in the Company's financial and operating profile. 

"Since we completed the significant expansion at our Madagascan operations, increasing our production capacity to 30,000tpa, we have been advancing discussions with multiple new customers, leveraging our decades of experience in the Graphite industry, to ensure they recognise Tirupati's scale and position as a leading provider of natural graphite outside of China.

"The prepayments announced today will significantly support our working capital requirements and provide suppliers and customers with confidence allowing us to maintain a strong pipeline of business."

Highlights

· Tirupati's preference has been to meet its working capital needs for ramping up of operations through non-dilutive arrangements.

· The Company has now successfully closed deals with certain existing clients in the United States and Europe with 100% upfront prepayment for orders placed.

· As a result, the Company has received c.US$ 1 million net of prepayment.

· The orders are to be shipped over a six-month period.

· These orders represent c.15% of the quantum of sales the Company expects to make over the six-month period.

· A discount of between 7 - 15% has been applied to the price in return for the pre-payments and which also reflects recent market price softening.

· The Company continues to ship goods to its other customers alongside and to realise proceeds thereof as per terms agreed with the respective buyers.

· The current average realisation period from shipment for the Company's other clients varies between 30 to 45 days.

· Accordingly, the Company expects to receive sufficient cash proceeds from its sales going forward to maintain the growth trajectory of its production and sales.

· The Company will use the funds to bridge gaps in cash requirements for ramping up its production and sales with targets as announced in RNS dated 8 August 2023.

· Going forward the Company will continue to focus on strengthening its cash position through other non-dilutive opportunities.

· Notably, the Company already has sufficient finished product inventory required to ensure it satisfies customer requirements in a timely manner, and also to allow the Company to take the benefits of the spot market and further business development purposes as we ramp up production.

Outcomes for the Company

· Significant cash-injection into the Company, allowing it to proceed with its ramp-up of production in Madagascar while the Company earns growing sales proceeds each month.

· Smoothing of working capital cash-flows by providing cash instantly for operations, will allow the Company to operate at higher production and utilization rates to help drive stronger sales growth. 

· Cash-receipts from larger monthly sales are set to be received in a waterfall manner of growing receipts as a result of their payment periods.

· The Company's ability to grow its market share faster in respect of the supply of natural Graphite should also be enhanced as it becomes a more visible partner of choice for customers. 

· The Company's graphite products are entering more supply chains associated with the decarbonisation of the global economy, enhancing the visibility and recognition of the Company's Sustainability strategy and the emphasis the Company has placed on lowering the carbon footprints of its flake graphite.

ENDS

For further information, please visit https://www.tirupatigraphite.co.uk/ or contact:

About Tirupati Graphite

Tirupati Graphite Plc is a specialist flake graphite company and places a special emphasis on "green" applications of flake graphite, including renewable energy, and energy efficiency, energy storage and thermal management and is committed to ensuring its operations are sustainable as well. 

The Company's operations include primary mining and processing in Madagascar, where the Company operates two key projects, Sahamamy and Vatomina. With the start of commercial production of its latest 18,000 tpa plant at Sahamamy in March 2023, it now has an installed capacity of 30,000 tpa high-quality flake graphite concentrate with up to 97% purity in Madagascar, planned to increase to 84,000 tpa as per the Company's modular medium-term development plan. 

On 1 April 2023 the Company completed the acquisition of Suni Resources SA, Mozambique, whose two main assets are (i) the Montepuez Project which holds the mining licence over an area of 3,667 hectares with JORC 2012 defined reserves & resources of almost 120 million tonnes; plus (ii) the Balama Central Project, which has a mining license over 1,543 hectares with JORC 2012 defined mineral reserves and resources of 33 million tonnes. Both projects have licenses permitting build out to an annual production of 100,000 and 58,000 tons of flake graphite respectively.

TG believes that the addition of these projects provides the Company with sufficient resources to achieve its ambition of satisfying 8% of the estimated global flake graphite demand - of around 5 million tons per annum - by 2030.